Toronto-Dominion Bank · TSX:TD
Toronto-Dominion Bank — Debt Investor Presentation (December 2010)
35 slides from Toronto-Dominion Bank's debt investor presentation, December 2010
Slide 1: Fixed Income Presentation
Fixed Income Presentation December 2010
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements From time to time, the Bank makes written and/or oral forward-looking statements, including in this presentation, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission, and in other communications. In addition, represent
Slide 3: Contents
Contents 1. Canadian Economy 2. Overview of TD Bank Group 3. Treasury & Balance Sheet Management 4. Appendix 3
Slide 4: Why Canadian Economy Outperforms
Why Canadian Economy Outperforms One of the 10 most competitive economies1 Soundest banking system in the world1 Canadian economy outperformed G7 over last decade Average annual real GDP growth of 2.7% from 1997 to 2009 Canadian economy beginning to show signs of recovery Strong Canadian
Slide 5: Solid Financial System in Canada
Solid Financial System in Canada Strong retail and commercial banks Conservative lending standards All major wholesale dealers owned by Canadian banks, with stable retail earnings base to absorb any wholesale write-offs Responsive government and central bank Proactive policies and programs
Slide 6: Canadian Mortgage Market is Different from the U.S.
Canadian Mortgage Market is Different from the U.S. Canada U.S. Outstanding mortgages include earlier Conservative product offerings: Fixed or exotic products (interest only, options variable interest rate option ARMs) New regulations on default insured Borrowers often qualified using discou
Slide 7: Canadian Economy
Canadian Economy Canadian Strengths Average Annual Real GDP1 Growth, 1997 - 2009 Canadian economy outperformed over last 2.7 2.5 decade 2.1 1.7 0.5 Canada U.S. UK Euro-area Japan Canadian Real GDP Growth2 Canadian economy out of QoQ % Change recession and global 6 Forecast economic recovery will
Slide 8: Canadian Economy: Near Term Slowdown
Canadian Economy Near Term Slowdown Commodity markets face TD Commodity Price Index1 growing headwinds Index; 1997=100 Forecast 400 350 300 Overall TDCI 250 200 150 100 TDCI Ex. Energy 50 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Canadian housing correction U.S. and
Slide 9: Canadian Economy: Long Term Support
Canadian Economy Long Term Support Canadian Unemployment1 Unemployment rate has Percent 14 peaked and will remain 12 below prior recessionary Forecast 10 peaks 8 6 4 2 0 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 Government finances in Canadian Federal Finances2 sound shape rela
Slide 10: Contents
Contents 1. Canadian Economy 2. Overview of TD Bank Group 3. Treasury & Balance Sheet Management 4. Appendix 10
Slide 11: Key Businesses: At a Glance
Key Businesses: At a Glance Adjusted Earnings1 Q4 2010 - C$1.3B Wealth Management4 Segments Business Canadian P&C2 U.S. P&C2 Wholesale Global Wealth TD Ameritrade3 54% 8% 3% 20% 15% Earnings Canadian Retail U.S. Retail Wholesale Mix 62% 23% 15% Brands 85% of earnings from retail operations 1. Based
Slide 12: Financial Results
Financial Results (C$MM) Q4 2010 QoQ YoY F2010 YoY Revenue $5,017 6% 6% $19,565 10% Provision for Credit Losses $404 19% -22% $1,625 -34% Expenses $3,263 10% 5% $12,163 Not Material Adjusted Net Income1 $1,260 -3% -4% $5,228 11% Adjusted EPS (diluted)2 $1.38 -3% -5% $5.77 8% Tier 1 Capital 12.20% -3
Slide 13: Key Takeaways
Key Takeaways Simple Strategy, Consistent Focus Building the Better Bank North America • Top 10 Bank in North America1 • Leverage platform and brand for growth • One of the few Aaa-rated banks on NYSE • Strong employment brand Retail Earnings Focus • Leader in customer service and convenience • Stro
Slide 14: TD Bank Group: A Top Bank in North America
TD Bank Group A Top 10 Bank in North America Compared to: Q4 20101 Canadian North American (In $U.S. Billions)2 Peers8 Peers9 Total Assets $607 2nd 6th Total North American Deposits $421 1st 4th Market Cap3 $63.2 2nd 6th Adj. Net Income4 (Trailing 4 Quarters) $5.1 2nd 5th Adj. Retail Earnings5 (Trai
Slide 15: Strong Focus on Risk-Return
Strong Focus on Risk-Return Return on Risk-Weighted Assets1 2.65% 1.95% 1.41% 2 4 TD Canadian Peers 3 U.S. Peers Better return for risk undertaken 1. Adjusted on a comparable basis to exclude identified non-underlying items. Based on Q3/10 results. 2. TD based on Q3/10 adjusted results, as defined o
Slide 16: Managing through Current Environment
Managing through Current Environment Get across the recession valley Carefully manage capital, funding, liquidity and risk ; Keep our business model intact Preserve our performance, convenience and service culture ; Emerging with momentum on our side Grown market share, extended footprint and
Slide 17: Simple Strategy, Consistent Focus, Superior Execution
Simple Strategy, Consistent Focus, Superior Execution Adjusted Earnings1 (C$MM) R CAG s: 13% $5,228 e a r g 5-y EarninS: 7% d P uste dE $4,716 Adj djuste A $4,189 $3,813 $3,376 $2,861 Wholesale Banking U.S. P&C Wealth Management Canadian P&C 2005 2006 2007 2008 2009 2010 Retail as % of Adj. Earnings
Slide 18: Key Takeaways
Key Takeaways Building The Better Bank North American Retail Earnings Focus Franchise Businesses Risk Discipline 18
Slide 19: Contents
Contents 1. Canadian Economy 2. Overview of TD Bank Group 3. Treasury & Balance Sheet Management 4. Appendix 19
Slide 20: Tier 1 Capital Ratio
Tier 1 Capital Ratio 12.2% 12.0% 11.3% 10.3% Strong capital position 9.8% Continued organic growth in capital Well-positioned for evolving regulatory environment Lower-risk, franchise wholesale dealer Risk-weighted assets are about one-third of total assets About 75% of Tier 1 capital in
Slide 21: TD Credit Ratings
TD Credit Ratings Issuer Ratings¹ Moody's S&P Fitch DBRS Aaa AA- AA- AA Strong credit ratings 21 1. As at September 2, 2010. Moody's: Issuer Rating, S&P: LT Foreign Issuer Credit, Fitch: LT Issuer Default Rating, DBRS: Senior Unsecured Debt.
Slide 22: Disciplined Risk Management
Disciplined Risk Management Enterprise-wide risk management policies and practices Risk measurement and quantification Scenario analysis Stress testing Integrated risk monitoring and reporting To senior management and Board of Directors Regular review, evaluation, and approval of risk
Slide 23: Robust Liquidity Management
Robust Liquidity Management Global liquidity risk management policy Low reliance on wholesale funding Incorporate off-balance sheet exposures into liquidity plan Monitors global funding market conditions and potential impacts to our funding access on a daily basis Match terms of assets and
Slide 24: Attractive Balance Sheet Composition
Attractive Balance Sheet Composition Funding Mix1 Earning Asset Mix3 Deposits with Banks Common Equity 5% 7% Credit Cards 61% Securitization 2% 9% Personal Commercial Residential Loans Deposits Mortgages Personal Term 19% 20% Non-Common 13% Deposits 13% Capital Business 1% and Government Medium Term
Slide 25: Funding Strategy
Funding Strategy Large base of stable retail and commercial deposits Limits on amount of deposits we can hold from any one depositor Large user of securitization program, primarily via Canada Mortgage Bond (CMB) Minimal reliance on wholesale funding historically Wholesale funding diversifi
Slide 26: Funding Programs
Funding Programs Euro Medium Term Note program US$20B of senior or subordinated notes Maximum US$5B of subordinated notes U.S. shelf program US$15B of Senior Debt Securities Covered Bond program €10B of covered bonds (senior debt) Other funding sources Domestic Medium Term Notes
Slide 27: Key Takeaways
Key Takeaways Strong capital base Excellent credit ratings Proactive and disciplined risk management Attractive balance sheet composition Diverse funding strategy to support growth plans 27
Slide 28: Contents
Contents 1. Canadian Economy 2. Overview of TD Bank Group 3. Treasury & Balance Sheet Management 4. Appendix 28
Slide 29: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q3/10 Q4/10 Canadian Personal & Commercial Portfolio $ 178.8 $ 182.9 Personal1 $ 147.6 $ 151.1 Residential Mortgages 57.8 60.6 2/3 insured Home Equity Lines of Credit (HELOC) 58.8 59.0 Unsecured Lines of Credit 9.2 9.2 Credi
Slide 30: Credit Portfolio Highlights
Credit Portfolio Highlights Canadian Personal Loss rates continued downward trend Canadian Commercial and Wholesale Continued solid credit performance U.S. Personal Results in the U.S. Personal portfolio continue to be acceptable Default rates trended down in the Residential Mortgage p
Slide 31: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio Highlights GIL Formations1: $MM and Ratios2 Gross Impaired Loan formations increased $83MM in $1,062 Q4, but decreased $56MM YoY $974 $23 / 12 bps $9 / NM U.S. P&C formations increased $918 $852 $66MM (US$68MM) over Q3 $835 Increase attributed to a s
Slide 32: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights Gross Impaired Loan rates $2,315 $2,253 have continued downward $2,218 $2,177 $2,070 $206 / 108 bps $84 / 46 bps trend since Q1 $2 / NM $190 / 100 bps $91 / 51 bps $180 / 89 bps Gross Impaired Loans have remained stable ove
Slide 33: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio PCL1: $MM and Ratios2 Highlights Year over year, Q4 PCL decreased $90MM or 19% $507 $480 $4 / NM PCL in all segments, with the $417 exception of Wholesale, was flat over Q3 as credit quality $2 / NM $340 $390 $188 / 133 bps $209 / 147 bps $1 / NM co
Slide 34: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: [email protected] Website: www.td.com/investor Best Investor Relations by Sector: Financial Services Best Retail Investor Communications 34
Slide 35: Fixed Income Presentation
Fixed Income Presentation December 2010
Toronto-Dominion Bank — Debt Investor Presentation (December 2010) on 6ix